Change of definition for non-portfolio landlords

Up until now, we had a different definition of non-portfolio landlords compared to the Prudential Regulation Authority (PRA). We have now brought our definition in line with the PRA.

For a start, we used to call them small portfolio landlords but we now refer to them as non-portfolio landlords.

A non-portfolio landlord has three or less buy-to-let mortgaged properties which can be with different lenders. If they have four or more buy-to-let mortgages, they are a portfolio landlord.

Previously we defined a non-portfolio landlord as one who had three or less mortgaged properties even if they owned other properties outright.

To be defined as a non-portfolio landlord, the properties they own must be single units such as houses or flats. They cannot be Houses in Multiple Occupation (HMOs) or Multi-Unit Freehold Blocks (MUFBs).

Our non-portfolio products are five-year fixed rates for purchase and remortgage and we can lend between £75,000 and £1.5 million.

The majority of landlords in the UK are classed as non-portfolio and although the latest government data is a little old it gives an idea of landlords in England.

The English Private Landlord Survey 2018 shows that 45% of landlords owned one rental property, which represented 21% of the private rented sector. A further 38% had between two and four properties, representing 31% of the PRS. This leaves 17% of landlords with five or more properties, which accounted for 48% of the sector.

Since 2010, the proportion of landlords with one property has fallen from 78% to 45% or from 40% to 21% of the sector. But the proportion of landlords with five or more properties rose from 5% to 17% or from 39% to 48% of the sector.

It would be interesting to see what it looks like now because, since 2017, there have been various tax changes that have had an influence on landlords. These include the extra 3% stamp duty charged for second properties and the tapering off of mortgage interest tax relief. This has led to an increase in the number of landlords creating limited companies to hold their property in as it can be more tax-efficient, especially if landlords own more than one property.